U.S.-based employers are budgeting for 3.5% raises for 2025, according to a survey of compensation professionals at 1,550 organizations globally by compensation management firm Payscale. So far this year, actual pay increases in the U.S. have averaged 3.6%, down from the 4% raises observed in 2023. Although pay increase rates are declining, 85% of employees will receive a base pay bump this year, compared with 83% last year.
Just two in 10 organizations anticipate a compensation budget that’s higher than last year’s, and even fewer are expecting a lower budget allocation. The majority of organizations (66%) expect budgets to stay the same. For those with higher budgets, increased competition for labor was the primary reason, followed by improved economic performance. For those with reduced salary budgets, outsized increases in years prior and concern about the economy were cited.
Source: Payscale
